Random Thoughts

Is that reverse dandruff in the brokers?

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BofA's uber-strategist Tom McManus, in lowering his equity allocation, cited a lack of fear in the market, earnings pressure/high valuations and rates at the bottom end of their range. He remains positive on energy, healthcare and materials.

"Shares of International Business Machines (IBM) have come within a nickel of a 75 print this morning. If we see it, that would be a triple bottom break on a Point & Figure half-point chart. Meanwhile, and somewhat ironically, my marathon cab ride from LaGuardia this morning (during peak rush hour traffic) also came within a nickel of a 75 print. And that definitely broke a triple bottom on my scale." -- Pepe Depew on this morning's Buzz.

A fellow Minyan forwarded me a list of the highest paid hedgies on the Street. As I chewed through the dew-and saw a lot of familiar faces-I realized how different my mission is now versus a few years ago. It's not easy to chase rewards that aren't predicated on financial compensation but if I've learned anything over the last 15 years, it's that net worth and self-worth aren't one and the same.

While last week was skeletal in more than a few ways, we saw a fair amount of protection being peeled off. And while some may not "believe" the recent rally, my sense is that the short base remains relatively muted. Perhaps the "new short posture" is sitting on the sidelines?

DeVibes from Lehman's Jeff DeGraaf..."With equities overbought, Friday was NASDAQ's worst day since the trough in late April. Hourly charts have been diverging and the momentum measures of accumulation seen through breadth and volume indications have failed to materialize. Sentiment work has moderated from its previous bullish tone, but it remains neutral and trends continue to support the bull case. Is this the pause that refreshes, or have equities staged a last stand that is now seeing the final flurry? In some ways, it's probably dependent on bonds."

Weight Challenge! The summer is officially upon us and those here at MVHQ are in desperate need of shedding a few pounds. At the suggestion of Minyan Rob Fraim, we are holding another Minyanville Weight Challenge in which the winner (or biggest loser) will win Critter Gear in a size smaller than they were at the beginning. Those who do not lose the highest percentage of weight will have the option, but not obligation, to make a donation to the Ruby Peck Foundation for Children's Education and will also feel much better because of it. Please get your weight in (along with any alias you'd like to be referred to by) by noon Wednesday. The contest will span six weeks and conclude July 20th.

The NYT Sunday Business section had a story about how the bond market, via a flattened yield curve, isn't consistent with the FOMC jawboning. Guess which one will ultimately win?

"The difference between dreams and goals is where you wanna go vs. how you're gonna get there." -- Greg Collins

"A successful investing operation requires part art, part knowledge, part luck and good judgment. And good judgment comes from bad judgment. It was good judgment to be bullish on a trading basis weeks ago when the markets were very oversold. Now they are more overbought than they have been in two years, at least by our analysis. Further, history suggests that financial accidents tend to occur roughly one year into a Fed tightening cycle, and that cycle began in June of last year. Consequently, color us cautious on a short-term trading basis, thinking the "emotional peak for the markets came last Wednesday."Uber-Minyan-and MiM2 keynote-Jeff Saut of Raymond James.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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